Page 11 - ITAtube Journal 1 2022

Market information
tions about the availability of the pipeline Northstream 2 causing relative empty gas reservoirs in Europe, has also created a boom in gas prices in 4th quarter 2021, who slowed down by the year-end. Now, since the conflict between Russia and Ukraine has broken out, the gas price is raising again (Fig. 7).
The Asian demand for Liquified Natural Gas (LNG) especially from the USA is enor- mous. Since April 2021 the Gas price had a rally from 2.5 to 6.3 US$/MMBtu (+250%), calming down to 3.8 US$ in January 2022 (Fig. 7). When the Russian Invasion started on 24th of February, the gas price went up again to 5 US$/MMBtu.
Especially European countries like Germany depend significantly on Russian oil and gas supplies. Due to the Russian invasion into the Ukraine, Europe is looking how to sub- stitute the gas supplies. First action taken was the suspension of the Northstream 2 pipeline.
The international Energy Agency high- lighted a possible alternative to replace about half of the Russian supplies. Anyhow still a growing appetite for gas consumption is enormous, the March flows of gas has averaged about 30% higher than February 2022.
So far, the world economic system and structures were based on relatively free trade and the philosophy that economic networks prevent from warlike activities. This world-view is being put to the test with still unforeseeable consequences for global free trade.
However, the reconsideration of the world oil and gas supplies will not only provide new challenges to our industry but also possible chances for future business.
The price rally of oil and gas have had a considerable effect on the number of oil and gas rigs in operation. Since the number of new oil and gas rigs itself is directly linked to the price of oil and gas, the recent price boom caused that the number of oil and gas rigs has significantly increased since October 2020 (Fig.9).
ITAtube Journal April 2022
Figure 7: Natural Gas price development 1 year up to 3rd February 2022 (US$/MMBtu)
Source: Tradingeconomics.com
Figure 8: How Europe could compensate the Russian gas supplies Source: International Energy Agency/Bloomberg Green
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Figure 9: US Total Rig Count 4 years up to 11th of March 2022 Source: OilPrice.com